GetGo, Tesco’s first checkout-free store, has recently opened in Holborn where customers can buy products without having to scan items or go to a till. Weight sensors in the shelves work alongside an AI system that tracks a customer’s movement around the store and monitors the items they pick up using cameras. Users must download the Tesco app and scan in using a QR code; the bill is then automatically charged to their bank account when they leave. Tesco follows in the footsteps of Amazon, who opened its first till-free store in London earlier this year, and now have six outlets across the capital. Both Aldi and Morrisons are also in the process of trialling similar concepts with the aim of eventually opening their own checkout-free stores.
Supermarkets are not the only retailers realising the advantages that technology and AI can bring to the retail experience. In the fashion space, Zara, UNIQLO, and Nike have been using self-service technology for a number of years to create a smoother buying process for shoppers. Meanwhile, many luxury brands including Gucci, Chanel, and Dior have been using augmented reality to create immersive shopping experiences for their customers.
More recently, GAP has acquired a start-up called Context-Based 4 Casting Ltd, which uses AI and machine learning to increase sales through predictive analytics and demand sensing. This follows its acquisition of Drapr earlier this year, an e-commerce start-up which powers 3-D fit technology and virtual fitting rooms. Marks and Spencer also announced last month its investment in technology fund True to gain early access to new technology.
A report from Juniper Research forecasts that checkout-free stores and smart checkout tech will reach over $45 billion in global transactions by 2023, up from around $253 million in 2018. It also predicts that smart checkout apps will act as a gateway to other technologies such as augmented reality. However, this might not yet spell the beginning of the end for supervised stores. Juniper’s report also predicts that these figures will still represent only a small fraction of all retail transactions. Clearly though, retailers are becoming increasingly aware of the advantages that technology and AI can bring to the retail experience. In such a dynamic sector, remaining ahead of the tech game could be pivotal to their future success.
Retailers are expected to experience significant sales growth this year, with apparel and health and beauty expected to see growth of 10.7% and 6.8% respectively, and many major retailers expect online sales to continue to grow, albeit at a potentially slower rate.
Increased online sales bring with it the increased consumer demand for returns of unwanted purchases. Several businesses have identified a commercial opportunity in this space to assist customers in navigating the returns process. Happy Returns, for example, offer in-person returns for online purchases, granting customers either an immediate refund or exchange without a box or label, side-stepping the occasionally fraught returns process and potentially sizeable shipping fees.
Despite Pinterest being tipped recently to join Happy Returns and Paidy as the latest addition to the PayPal group, Paypal’s interest in the pin-board site appears to have cooled. The acquisition, reported to be in the region of $45 billion, seems to have collapsed.
On the topic of acquisitions, Swedish furniture giant Ikea has bought Topshop’s famous flagship store on Oxford Street. The store is expected to be somewhat different to traditional Ikea megastores, although 5,000 products are expected to be available for collection at the site, including the company’s famous meatballs.
Contrary to the fashion industry’s efforts towards sustainability (the focus of last month’s aggregator) ecommerce behemoth Alibaba has formed its own answer to the fast-fashion hype in a bid to compete with Chinese store Shein in the affordable fashion market.
In other fashion news, Rent the Runway surpassed its estimated $1.5 billion value on the first day of trading on the NASDAQ, hitting an initial high of over $1.7 billion at $23 a share. The share price has since receded following the initial surge to settle at around $16 a share.